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Why ‘no deal’ broke the Brexit committee

4 April 2017

8:17 AM

4 April 2017

8:17 AM

Last week, disgruntled MPs walked out of a meeting of the Commons Brexit Select Committee — chaired by Hilary Benn — in protest at a report they claimed was ‘too gloomy’. Today that report has been published in its 155-page entirety.  As expected, the committee is divided over its contents — with Tory members of the committee objecting to it. Dominic Raab says it is ‘rushed, skewed and partisan’, while his fellow committee member Alistair Carmichael claims it’s a devastating critique that shows ‘the government’s handling of Brexit makes a Jeremy Corbyn reshuffle look like a smooth operation’.

The Commons Brexit Select Committee is split over its latest report

The main source of contention concerns two paragraphs on the effects of a ‘no deal’. In contrast to Theresa May’s claim that no deal is better than a bad deal, it says that a ‘no deal’ in the negotiations represents ‘a very destructive outcome leading to mutually assured damage for the EU and the UK’ — and it is therefore ‘very important’ that this outcome is avoided. Following David Davis’s admission that he ‘could not quantify’ the impact of failing to agree a new trade deal before we leave in 2019, it goes on to assert that the government has no basis for claiming that Britain would be fine if it left the EU without a trade deal and fell on WTO terms:

‘Without an economic assessment of ‘no deal’ having been done and without evidence that steps are being taken to mitigate what would be the damaging effect of such an outcome, the Government’s assertion that “no deal is better than a bad deal”, is unsubstantiated. Parliament must be in an informed position to decide whether a proposed deal is, in fact, better or worse than “no deal”.’


There’s a reason the Tory MPs don’t like this. The majority of Brexiteers would like to see a deal agreed (with some caveats) as no deal is not their first choice. But they feel the committee’s negative findings on what a ‘no deal’ would mean relies too much on the evidence of figures such as Sir Ivan Rogers, the former EU ambassador who has been accused of casting a ‘gloomy pessimism’ over Brexit and causing issues in David Cameron’s original negotiation. What’s more, there are concerns that a ‘no deal’ forecast would reveal the government’s strategy and prove unhelpful in the negotiations. On the other side, there are some Remainers who want a ‘no deal’ valuation to show how bad a departure on WTO terms could be and in turn help their case for a ‘soft Brexit’ (which could see compromises on issues like freedom of movement of ECHR).

So, it’s not that surprising that the MPs have on the committee have clashed over Benn’s report. But is a ‘no deal’ forecast a good idea? It may sound like one in practise but even if the ‘cost’ of no deal was quantified it could not be taken as gospel. Remember the Treasury’s forecasts before Brexit? If George Osborne’s Treasury predictions had held true we would currently be in the midst of an immediate year-long post-Brexit recession. Instead the UK economy has continued to defy Project Fear warnings (and undermined public confidence in the Treasury). Often what you get out is what you put in — so there’s no guaranteeing any forecast would prove more accurate than the government’s last round of Brexit predictions.

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